Copper sank as much as 4.3% during a broad selloff on the London Metal Exchange, tracking steep losses in the Chinese yuan.
The metal also fell 4.6% to $9,389 a tonne in early morning trade on the Comex in New York.
[Click here for an interactive chart of copper prices]
Alongside the immediate impact of a weakening currency in the world’s top commodities consumer, traders are also bracing for a potential knock to demand if Trump follows through with pledges to deepen the US-China trade war.
“This scenario is expected to bring about the promised tariffs on imported goods, particularly targeting China, potentially triggering a new wave of trade tensions and economic disruptions,” said Ole Hansen, head of commodity strategy at Saxo Bank.
A gauge of steel companies’ stocks jumped as much as 12%, the biggest intraday gain since March 2020, on anticipation that Trump will return to the White House favoring one of his top priorities during his first administration: tariffs on steel imports from across the globe.
Investors will also be mindful that Beijing could respond with stimulus measures to invigorate domestic demand, said Marcus Garvey, head of commodities strategy at Macquarie.
(With files from Reuters and Bloomberg)
